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The U.S. Department of Defense has cancelled the controversial $10 billion JEDI (Joint Enterprise Defense Infrastructure) cloud computing contract awarded to Microsoft in 2019 after years of continued lobbying and legal squabbling among rival vendors.
"The Department has determined that due to evolving requirements, increased cloud conversancy, and industry advances, the JEDI Cloud contract no longer meets its needs," the DoD said in a statement.
The JEDI contract will be replaced by a new one dubbed Joint Warfighter Cloud Capability (JWCC). Microsoft and AWS are welcome to submit bids and the DoD plans to investigate whether other cloud providers have the capability to meet the contract's demands.
JEDI was first announced in September 2017, with most observers expecting AWS to win out over Microsoft, IBM, Oracle and Google. Oracle filed a federal lawsuit over the DoD's handling of the contract, but a judge threw out that action in July 2019.
Amazon also filed suit that year, claiming that political influence on the part of then-President Donald Trump about the company had tainted the procurement process. Trump has famously feuded with Amazon founder Jeff Bezos. A judge ruled in April that Amazon's suit could go forward, but it wasn't immediately clear how the JEDI contract's cancellation would affect it.
Besides needing updated technical specs to satisfy the DoD's needs, politics may have played a role in the decision.
"This has to do, in part, with Trump sticking his nose into the matter and now it has the smell of the last administration," said Frank Dzubeck, president of Network Communications Architects, consultants in Washington, D.C. "In fact, government bids going out that have an association with the last administration will be considered one of the walking dead."
One benefit to the cancellation, Dzubeck said, is the DoD perhaps learned a lesson by offering a contract like JEDI to a single vendor. He believes the agency will contract with multiple cloud providers, if only because there will be a greater emphasis on implementing hybrid clouds and their more complex security schemes compared with the original single cloud architecture planned for JEDI.
"After JEDI, this next one is going to multiple vendors," Dzubeck said. "AT&T might be making a similar mistake giving everything over to Microsoft's Azure last week in that deal where they will have to replace every pipe with one from Microsoft."
R 'Ray' WangFounder and CEO, Constellation Research
The stricter qualifications prospective candidates face, mostly the requirement to be certified on all three classification levels, namely unclassified secret and top secret, as well as have top-tier cybersecurity controls, could hurt the chances of some would-be candidates. Microsoft already meets those qualifications through its successful bid on the JEDI contract.
"This gives someone like Google a higher barrier to jump over compared with a Microsoft who does have these certifications," Dzubeck said.
Microsoft responded to the DoD's decision with a blog post that struck a conciliatory tone.
"We understand the DoD's rationale, and we support them and every military member who needs the mission-critical 21st century technology JEDI would have provided," the company said. "The DoD faced a difficult choice: Continue with what could be a years-long litigation battle or find another path forward. … It's clear the DoD trusts Microsoft and our technology, and we're confident that we'll continue to be successful as the DoD selects partners for new work."
AWS couldn't immediately be reached for comment.
Overall, the JEDI saga appears to be largely a waste of time and effort, in one observer's view.
"The bottom line was the lobbying by Oracle and Amazon shook the confidence of the JEDI [procurement] team," said R "Ray" Wang, founder and CEO of Constellation Research. "Requirements changed so it was easier to terminate and then invite AWS and Azure to join later. Now the question is whether or not Google will bid for the deal again, or Oracle."
"The government is a bit smarter now on how to create exclusive inclusion criteria that will limit the contestants to Azure and Amazon or force Oracle and Google Cloud to commit to the minimum requirements," Wang added.
Editor-at-Large Ed Scannell contributed to this report.